County staff outline Phase 2 of energy performance contract to electrify and upgrade 24 facilities; staff seeking capital stacking and grant funding

Santa Fe County sustainability staff and Energy Systems Group (formerly Year Out Energy) presented plans on Jan. 14 for a second phase of an energy performance contracting (EPC) program that would implement energy- and water-efficiency upgrades across 24 county facilities and provide a guaranteed-utility-savings guarantee.

Lede: The county's sustainability manager and the ESCO presented an investment-grade-audit (IGA) scope for about 24 county facilities, describing measures that include LED lighting, building weatherization, water conservation, photovoltaic arrays and targeted HVAC electrification. Staff estimated a net project cost in the IGA near $4.75 million, with a proposed county capital contribution of about $2.25 million, leveraging additional financing and incentives (tax/IRA benefits, rebates and guaranteed savings) to fund the balance.

Nut graf: Officials said the EPC approach transfers performance risk to the vendor: Energy Systems Group would guarantee savings and would be responsible to pay the shortfall if annual measured utility savings fall below targets. The presentation outlined an expected reduction in energy use (about 11%) and energy costs (about 15%) from the proposed Phase 2 measures and described a project schedule that would deliver the IGA report in late February, seek financing and implement construction over roughly one year, followed by annual measurement-and-verification reporting.

Details from the presentation - Background: Phase 1 (completed 2023) covered 14 facilities, reduced utility costs and emissions and included solar installations and lighting upgrades. For Phase 2, the county is expanding to 24 facilities and including limited HVAC electrification measures at select buildings (noted examples: Benny Chavez, Agua Fria Fire Station and Edgewood, the latter still under consideration).

- Cost and funding approach: Staff provided an order-of-magnitude net project cost (~$4.75 million). The county's proposed capital contribution (~$2.25 million) would be leveraged by guaranteed savings (another ~$2.25 million) and additional incentives (rebates, IRA benefits) for a total program value in excess of $5 million, per the vendor's presentation. Staff said additional grant and financing opportunities would be pursued and that the contract is procured under the state price agreement for energy performance services.

- Measures and prioritization: The ESCO emphasized bundling measures with quick paybacks (LED lighting, water conservation, solar) alongside capital-intensive items (HVAC electrification, roofing) so that the project cash-flow balances over the finance term. The vendor also highlighted that HVAC replacements have long service lives and would be included only where appropriate. Public-works coordination and review of planned facility renovations will be required to avoid rework.

- Schedule: Staff expects to deliver the Phase 2 IGA report in late February, then finalize financing and execute an EPC contract; implementation was described as a roughly 12-month construction window and an ongoing performance-verification period afterward.

Why it matters: The EPC approach provides a method to use guaranteed future utility savings to pay for near-term capital upgrades, transfer performance risk to a private vendor, and accelerate electrification steps that the county identified in its operational greenhouse-gas reduction plan. Commissioners asked for more granular figures comparing payback and life-cycle savings for representative measures; staff said they will provide those details in the formal proposal expected in the coming weeks.

Speakers and roles: Jacqueline Beam, sustainability manager, Santa Fe County Community Development; Tara Trafton (Energy Systems Group, project manager); Public Works staff supported coordination and answered facility-level questions.

Next steps: Staff will finalize and deliver the Phase 2 IGA by end of February, complete the state third-party review and return to the commission with a formal proposal that includes detailed cost-benefit analyses, recommended scope and financing options.

Ending: Commissioners and staff agreed the work merits further review; staff will bring a finalized IGA and financing plan back to the commission for approval before construction begins.